Amity Schlaes has an eye-opening piece in City Journal about how the equality has replaced growth as an ideal in our society.
The change stems in part from a revised view of American history, which is no longer seen as the story of opportunity and triumph but rather as a string of wrongs that must be righted. Equality is seen as the way to right these wrongs.
Schlaes argues that there is an irony: Policies that promote growth are actually the ones that lead to more equality. But academia doesn't see it this way, and one division of academia that might have been expected to take a more fact-based view of the subject has signed on the the equality movement. Schlaes writes:
The equality campaign spills over into a less obvious field, one that might otherwise provide a useful check upon the nonempirical claims of the humanities: economics. In a discipline that once showcased the power of markets, an axiom is taking hold: equal incomes lead to general prosperity and point toward utopia.
Teachers, book review editors, and especially professors withhold any evidence to the contrary. Universities lead the shift, and the population follows. Today, millennials, those born between 1981 and 2000, outnumber baby boomers by the millions, and polls suggest that they support redistribution specifically, and government action generally, more than their predecessors do.
For the time being, progressive intellectuals seem inclined to put up with the market, despite their distaste for it:
At least for now, most progressives acknowledge that markets and economic growth are necessary. But progressives in academia contend that growth has proved itself secondary to equality efforts—something to be exploited, rather than appreciated. Not just nationally, but worldwide, policymakers and the press regard the subordination of growth to equality to be a benign practice, as in the recent line in the Indian periodical Mint: a policy aimed at “reducing inequality need not hurt growth.”
There are even measures to assess how a society is faring in promoting equality:
The redistributionist impulse has brought to the fore metrics such as the Gini coefficient, named after the ur-redistributor, Corrado Gini, an Italian social scientist who developed an early statistical measure of income distribution a century ago. A society where a single plutocrat earns all the income ranks a pure “1” on the Gini scale; one in which all earnings are perfectly equally distributed, the old Scandinavian ideal, scores a “0” by the Gini test.
The Gini Index has been renamed or updated numerous times, but the principle remains the same. Income distribution and redistribution seem so crucial to progressives that French economist Thomas Piketty built an international bestseller around it, the wildly lauded Capital.
Unfortunately, as with many liberal policies, the people who are supposed to benefit don't–they'd likely fare better in a strictly market-oriented society. Schlaes writes:
But progressives have their metrics wrong and their story backward. The geeky Gini metric fails to capture the American economic dynamic: in our country, innovative bursts lead to great wealth, which then moves to the rest of the population. Equality campaigns don’t lead automatically to prosperity; instead, prosperity leads to a higher standard of living and, eventually, in democracies, to greater equality. The late Simon Kuznets, who posited that societies that grow economically eventually become more equal, was right: growth cannot be assumed.
Schlaes charts how the quest for equality has played out in American history. President Coolidge and his Treasury Secretary Andrew Mellon sought prosperity through lower taxes.
With more money in their pockets, affluent Americans could invest it. Innovation ensued, giving Americans more leisure and luxury, and something new: Saturdays off for the majority of employed Americans.
Franklin Roosevelt's U.S. would have scored higher on the Ginni Index. Roosevelt pushed for higher taxes and obligated employers to pay higher wages. What happened reminds us of what is happening now in places that have raised the minimum wage to unrealistic levels :
The destructive role of high labor costs was made especially clear recently in the work of Lee Ohanian of UCLA. The obligation to pay higher wages when employers could not afford them forced employers to make their own, bitter, choice: they simply hired fewer workers. Hence the refrain we have heard from our parents, grandparents, and great-grandparents: “The Depression was all right—if you had a job.” Those who didn’t found themselves locked out. For ten years, joblessness stuck stubbornly in the double digits. This mattered far more to families than any theoretical envy index.
This is a long article but well-worth reading.